Location Based Marketing holds many possibilities and capabilities to make a great difference on gaining or maintaining customers when used correctly.
The advantages that Location Based Marketing can have in a business can be great, and you will see some great examples below.
But before we get into details lets start from the basics.
What is Location Based Marketing?
Mobile marketing is using what is called “Location Based Services” and nowadays they are integrated in almost any mobile device in the market, including tablets, smartphones or even the latest smartwatches.
With more than 7 in 10 people in the UK owning a smartphone this opens up new frontiers in relation to how the digital content can be marketed and many new and interesting ways to attract possible customers.
How can Location Based Marketing benefit your business?
With this technology, we can now for example target potential customers that are close to our point of interest (possible a retail shop or anywhere we would want people to go) and possibly offer them deals to attract them.
- One good and simple example is the location based marketing that McDonald’s did in 2011 at New York. They tagged all the McDonald’s stores and whenever someone was searching for them in a two block radius, they were presented with a discount e-coupon to visit the particular store that was near them. This method was very successful.
- Another great example comes to us from Guatemala where a shoe retail shop named Meat Pack used location based services to literally steal customers from their competitor shops such as Adidas.
With the help of those services, they managed to convince more than 600 customers to choose them over their biggest competitors in one week.
The name they used for their campaign? Hijack. How did they do it? They added location-based “signal fences” around their competitor stores, and one more at their own store.
Then when the potential customer entered the competitor’s store, they were offered a discount of 100% at Meat Pack if they exited the store right now and went to Meat Pack.
The magic trick here was that the discount was dropping 1% each second so people would quite literally have to run to Meat Packin order to get the highest discount.
Imagine the buzz that people running towards their store would make.
- Of course Mobile Marketing has been used for marketing in the UK as well.
Bulmers with a partnership with O2 installed “signal fences” around 0.5 mile of each pub that sold Bulmers.
Then using a specific demographic profile, each time someone fitting that profile entered one of the “signal fences”, he was sent an MMS message offering him a discount at the particular pub if he bought Bulmers.
During the first week of the campaign running, more than 50% of the targeted people, clicked the link and around 25% used the discount.
As you can see, location based marketing when used correctly and in a clever way, can have great results.
The biggest challenge though is to make the location based service that you might be using relevant to the users you are trying to target.
If used as a new way of just spamming the users, it can and possible have, a negative impact rather than what you would have hoped for.
How does Location Based Marketing work?
Mobile Marketing takes advantage of Location Based Services.
This is achieved using a set of different technology types such as GPS tracking, Bluetooth ,or even WiFi. As an example we can see the iBeacon that Apple launched recently that uses Bluetooth as a proximity sensor to know when an enabled device is close to it. Those services can be rather sophisticated but are always based in one simple fact. We can know where any mobile devices that include those services are constantly.
Using one or a combination of these technologies, one can pinpoint the location of the device with surprising accuracy.
Then using this data they can serve the user with targeted content based on their location or a combination of other criteria.
To conclude, location based marketing opens up great new ways of marketing, and when used correctly and in an innovative and smart way, can have a great impact on any business.